Experts suggest that to understand how Americans feel about the economy and their wallets, one should look at how they buy perfume.
During times of economic instability, consumer behavior experts say shoppers tend to change their shopping habits, especially for non-essential items. They often switch to cheaper goods, reduce the frequency of shopping, or even stop shopping altogether.
Perfume is also not immune to this trend. Data from Pattern – a company specializing in analyzing online product search data on Amazon and other platforms – shows that demand for affordable roll-on perfumes has increased by 207% this year compared to last year. Demand for mini perfume bottles has increased by 183% and body sprays by 30%.
This is just one of the ways consumers are choosing to cut spending, even though traditional economic data suggests a brighter picture in the US.
Even during a recession, price-sensitive buyers don't completely abandon expensive non-essential goods, such as premium chocolate, perfume, and high-end cosmetics. These are the things that help them feel better.
This is known as the lipstick effect – consumers continue to spend on luxury products during a recession to relieve stress.
Perfumes are displayed for sale in a shopping mall. Photo: Bloomberg.
"When you look at the economy, consumer confidence is wavering a little. They're tightening their belts," said Dallin Hatch, a data analyst at Pattern. Similar to the "lipstick effect," he explained that perfume is emerging as a new luxury item for buyers during times of financial uncertainty. "You should consider this a new indicator of consumer confidence," Hatch said.
Another report from market research firm Circana shows that mini perfume bottles are becoming the top choice for perfume buyers in the first half of this year. Based on retail data, sales of mini perfumes have significantly outpaced overall perfume sales. Mini product sales accounted for 38% of the industry this year, up from 35% last year.
"Perfume bottles under 1 ounce (30 ml) are selling three times faster than regular perfumes. They're cheaper, costing only about a third of the price of larger bottles. Therefore, they're suitable for consumers who want to cut down on spending but still want to treat themselves," says Jacquelyn Wenskus, a perfume expert at Circana. This trend started last year.
Furthermore, despite economic concerns, the report indicates that the trend of spending on self-care also boosted sales of cosmetics, skincare, and haircare products in the first half of this year. Sales of high-end cosmetics reached $14 billion in the first half of the year, a 15% increase year-on-year. Meanwhile, the affordable segment generated $28 billion, a 9% increase.
"The cosmetics market is hitting the right spot. Brands are effectively meeting customers' emotional needs, especially at a time when purchasing power remains constrained," said Larissa Jensen, cosmetics industry advisor at Circana.
Ha Thu (according to CNN)
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